What to do with your tax return

What’s the next best time of year outside of the holiday season? Tax return time!

Almost half of Albertans will have received or expect to receive a refund this year. Your refund comes with one very important question: What do I do with this money?!

And depending on who you ask, the advice you receive could be conflicting.

“Spend it! You worked hard. Enjoy yourself; you deserve it!” Or perhaps... “Time to save. Now is not the time to make rash decisions.”

Money, as I’m sure you know, has a funny way of eliciting emotional responses to these financial quandaries. Sometimes your time and energy are better spent not justifying “right vs. more right”, but rather in reviewing your big financial picture through a more rational lens. What are your goals? What do you want and need to achieve? Are you making an optimal decision that will help you realize you goals?

For some, there may be simple answers. For others, the answers are not as cut and dry. Regardless of your situation, I would encourage you to seek expert advice from a financial advisor.

Complicated financial situations warrant a bit more investigation to arrive at doing what’s right for you.

Typically, your financial advisor will review your plan and help you determine your short- and long-term savings and investment goals. Together you can approach—from an objective perspective—your financial decision to either:

Pay down your debt and reduce your costs of borrowing, or

Maximize your returns based on your unique circumstances.

The typical investor approaches growing savings and repaying debt as two separate objectives that are independent of each other, when in reality they are inextricably tied.

The bottom line:

The answer to “What do I do with my tax return?” (and likely most of your money for that matter) is not a simple one.

What I will say is that a good financial advisor is worth their weight in gold, and sound advice taken early is priceless.

The information provided is a simplified general summary and is not intended to replace or serve as a substitute for professional advice. Professional tax advice should always be obtained when dealing with taxation issues as each individual’s situation is different. This information has been obtained from sources believed to be reliable but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. This information is subject to change and ATB Investment Management Inc. reserves the right to change the information without prior notice, and does not undertake to provide updated information should a change occur.

ATB Financial, ATB Investment Management Inc. and ATB Securities Inc. do not accept any liability whatsoever for any losses arising from the use of this document or its contents.

ATB Investment Management Inc. and ATB Securities Inc. are wholly owned subsidiaries of ATB Financial and operate under the trade name ATB Investor Services. ATB Securities Inc. is a member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. This brochure is not, and should not be construed as, an offer to sell or a solicitation of an offer to buy any investment. This document may not be reproduced in whole or in part; referred to in any manner whatsoever; nor may the information, opinions, and conclusions contained herein be referred to without the prior written consent of ATBIM.